Markforged Holding Corporation

Greetings and welcome to the Mark Forged second quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star, then zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Austin Bolling. Thank you, Austin. You may begin.

Good afternoon. I'm Austin Bollig, Director of Investor Relations of Mark Forge Holding Corporation. Welcome to our second quarter of 2023 results conference call. We will be discussing the results announced in our earnings press release issued after market closed today. With me on the call is our President and CEO, Shai Turem, and our Acting CFO, Asaf Sapori. Before we get started, I'd like to remind everyone that management will be making statements during this call that include estimates and other forward-looking statements, which are pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. These statements represent management's views as of today, August 10, 2023, and are subject to material risks and uncertainties that could cause actual results to differ materially. Mark Forge disclaims any intention or obligation, except as required by law, to update or revise forward-looking statements. Also during the course of today's call, we refer to certain non-GAAP financial measures. There is a reconciliation schedule showing the GAAP versus non-GAAP results currently available in our press release issued after market closed today, which can also be found at our website at investors.markforge.com. I'll now turn the call over to Shai Taram, President and CEO of Markforged.

Thank you, Austin, and thank you, everyone, for joining us on our Q2 2023 earnings call. I'm proud of our team performance in the second quarter as we continue to execute on our long-term strategy to grow through innovation and bring industrial production to the point of need. And not less important, we prudently managed our costs, as well keeping us on a firm path to profitability. While we have a long journey ahead, we believe Markforge feels a critical need in the market to strengthen manufacturing resiliency and supply chains. The demand for our solution continues to grow as our customers identify more and more opportunities to cut costs, save time, and reduce physical inventories while building efficiencies to their own production lines. With our upcoming new platforms and capabilities, we are confident in our ability to accelerate our growth in 2024. Demand for the digital forge continue to grow globally in Q2, even in the face of high cost of capital environment, which is restricting capital expense investments. As such, while conversions to close deals are still challenging in the short term, we are confident in our longer term growth projection. especially with our upcoming product releases. Our latest composite printer innovation, the FX20, continues to excite our customers globally, specifically within industrial and high-regulated markets like aerospace and automotive. Coupled with the growing order pipeline of our newest metal binder jetting solution, the PX100, we remain excited about our future growth prospects. but we are not done yet. For the last two years, we've been hard at work on multiple new product innovations that accelerate production at the point of need and increase our addressable market. We believe we have the go-to-market engine in place to truly scale these new innovations. I look forward to sharing these new products with you over the coming quarters. We are seeing manufacturers around the world reshaping their supply chains as they seek more resiliency and flexibility by investing heavily in digital transformation and industrial automation. Our customers tell us that DigitalForge is the perfect tool for their manufacturing floor and accelerates their ability to produce industrial parts on demand right where they need them. Just one example of these trends in action is our recent win with a tier one automotive OEM. In Q2, we completed a very important and strategic transaction with a global automotive leader to drive flexibility and cost savings by reducing the reliance on physical inventory. This sale includes over two dozen of both advanced composite printers and metal systems as part of a multi-year strategic initiative. This win is a great proof point of how our platforms of hardware, materials and software and growing distributed network of printers are uniquely positioned to proactively capitalize on the growing market opportunity for point of need industrial production. We beat out the competition by delivering the reliability required to print mission critical parts at scale with the advanced software needed to securely manage a fleet of this size in real time across multiple teams of engineers and IT systems. Markforge is extremely excited about this deal, and we believe we can continue to leverage these same strengths to win similar opportunities in the future. Another example of how our innovations are providing value to our customers is SQP Engineering. an industrial manufacturing solution provider in Perth, Australia. SQP faced challenges producing a complex cover for mining equipment systems. Traditional machining methods were not cost-effective, and their existing polymer 3D printer was too slow and produced parts which did not perform. To address these issues, SQP turned to our FX20, which is significantly reduced the print time compared to their existing polymer 3D printer, while vastly improving performance and surface finish. They also integrated the Markforged Metalex system to expand their additive capabilities. With these solutions, SQP can now manufacture a wide range of production-grade parts that cannot be machined, offering better pricing and turnaround times. The company plans to use the FX20 and Metalex systems to expand into the medical, aviation, and agriculture sectors. While we continue to grow as we target the $43 billion market opportunity to make supply chains more resilient and flexible, we remain mindful of our operational efficiencies in driving margin expansion in pursuit of profitable, sustainable growth. Non-GAAP growth margins are tracking towards the upper end of our 2023 guidance while we remain on track to achieve full production scale for the FX20. We continue to remain focused on our operating expenses, which were down 11% year-over-year on a non-GAAP basis, and on finding additional working capital efficiencies. Capital management is key, and we remain committed to achieving profitability with a healthy balance sheet and without dependency on external funding. The second half of 2023 is shaping up to be super exciting for us as we plan multiple new product introductions which further enhance our current platform and should contribute to our accelerated growth in 2024. I can't wait to welcome you to our Fall Investor Day in our new headquarters where we'll get a chance to showcase some of our products and meet the people who are working tirelessly every day to accelerate the adoption of the industrial production right at the point of need. With that, I now turn the call over to Asaf Sibori, our Acting CFO, who will offer more details on our financial performance and guidance for the remainder of the year.